Survey: 90% of Batswana earn below P10, 000 monthly
Brian Benza | Friday July 17, 2015 18:03
Results of the Making Access Possible (MAP) report released in Gaborone this week, show that a combination of high cost of land as well as low incomes has excluded the majority of the population from mortgage finance.
The MAP study derived the income distribution figures from the 2015 Finscope survey, which was conducted between October and December last year sampling 1503 respondents from Botswana’s total population of 1.3 million adults.
The survey aimed to gauge financial inclusion by measuring the proportion of the population using both formal and informal financial services and products. According to the results of the survey, 71 percent of all individuals earn less than P1, 500 per month while 22 percent have no income at all.
Respondents to the Finscope study also identified no or little income as the biggest barrier to access to financial services products and services such as credit, savings and remittances.
Economist Keith Jefferis, whose company Econsult was part of the team that carried out the survey, said the data factors all adults in Botswana including dependents and not just those that are economically active.
“The figures do paint a picture of very levels of income in Botswana, but the data is quite crude as it is based on responses from interviewees.
“People are quite bad at estimating their own incomes, especially the dependents.
The figures also looks at all adults in Botswana, not just those that are formally employed,” said Jefferis.
According to the survey results, for one to qualify for a P550, 000 mortgage loan they need to be earning at least P15, 000 per month.
However, a low cost house in Gaborone’s Phase Two costs P600, 000 while a medium cost house in Block 10 costs up to P1 million.
One needs to earn at least P25, 000 per month to qualify for a P1, 000,000 mortgage loan.
About 350,000 people are formally employed in Botswana with 40 percent of them working for government. The latest Botswana core welfare index survey conducted by Statistics Botswana shows that only 3.3 percent of the population lived in purchased housing units as at 2010, a slight increase from 1.3 percent in 2002.
“Results indicated a general increase in housing units ownership, but with the high likelihood of individuals or households owning more than one housing unit as indicated by the increase in households occupying individually owned housing units,” Statistics Botswana said.
Analysts say an artificial shortage of space for development of residential properties created by unfriendly land policies is largely responsible for irrationally high plot and residential properties in and around Gaborone. While the Welfare survey results show that household disposable mean incomes at national level increased by 119 percent from P2, 425 in 2002/03 to P5, 304 in 2009/10, there was also an increase in income inequality in the period.
As measured by the Gini coefficient index, Botswana’s income inequality increased from 0.573 in 2002/03 to 0.645 in 2009/10.
The Gini coefficient ranges from one to zero where one means that there is complete inequality while zero means that there is complete equality.